prada 1q 2014 results presentation

8/12/2019 Prada 1q 2014 Results Presentation

1/15

1stQuarter Results as of April 30th, 2014

Milan, June 5th, 2014


2/15


A Quarter of Transition

1stQuarter 2014(*) Highlights

TURNOVER

Retail channel up 3% (+8% at constant rates)

Wholesale channel 25% drop (-24% at constant rates) Total Revenues almost flat (+4% growth at constant rates)

OPERATING

RESULTS

EBITDA213.9 mn, 28% on Revenues

EBIT156.3 mn, 20% on Revenues

Group Net Income to105.3 mn, 14% on Revenues

FINANCIALRESULTS Strong operating cash flow generation,178.3 mn

Positive net financial position at349.1 mn as at April 30, 2014 improved

by53 mn

HIGHLIGHTS

1. Continued sound growth in retail channel on a very tough comparable base

(+21% organic retail growth in Q1 2013)

2. First quarter impacted by

unfavorable exchange rate environment

expected wholesale drop

unfavorable calendar of Chinese New Year

3. Pressure on margins expected to ease during the year

Note(*): unaudited


3/15


Net Sales by Channel (mn)1st Quarter

Retail

+8% at constant rates: only driven by 89 net openings since May 1, 2013, SSSG almost flat in the period

Wholesale

particularly affected in the quarter by enduring selective strategy and stagnant domestic demand in some European

countries,

1Q 2014 to be considered the last tail of the rationalization, the trend in the forthcoming quarters will be more stable

2013Mix

%2014

Mix

%

% ch.

as reported

% ch.

same FX

Retail 678.7 88% 697.8 91% +3% +8%

Wholesale 93.9 12% 70.6 9% -25% -24%

Total 772.6 100% 768.4 100% -1% +4%


4/15


Net Sales by Geography (mn)1st Quarter

Europe (Italy included): touristic traffic impacted by Eurostrength and by some geo-political problems and domestic

consumption still lacklustre

Americas: very good performance notwithstanding the bad weather conditions in the first part of the year

Far East: softer trends in Hong Kong, Korea and Singapore, while China, Macau and the other Asian countries continued to

maintain solid growth rate

Japan: strong double-digit growth both at constant and reported exchange rate, decelerated during April as a consequence of

the VAT increase rates.

2013Mix

%2014

Mix

%

% ch.

as reported

% ch.

same FX

Retail

Europe 213.5 31% 213.9 31% - +1%Americas 75.0 11% 82.1 12% +10% +16%

Far East 289.3 43% 286.0 41% -1% +4%

Greater China(*) 200.4 30% 199.6 29% - +4%

Japan (**) 78.5 12% 91.9 13% +17% +30%

Middle East 21.9 3% 23.4 3% +7% +12%

Others 0.5 - 0.5 - -1% -

Total Retail 678.7 88% 697.8 91% +3% +8%

Wholesale 93.9 12% 70.6 9% -25% -24%

Total Sales 772.6 100% 768.4 100% -1% +4%

Note(*): PRC, HK, Macau

Note(**): Japan and Hawai


5/15 41stQuarter Results as of April 30th, 2014

Group Net Sales by Region/channel (mn)1st Quarter

Italy11%

Europe20%

America12%

Japan13%

AsiaPacific41%

MiddleEast3%

773 768

Q1 13 Europe America Japan AsiaPacific

MiddleEast

Wholesale FxImpact

Q1 14

Retail: +8% at constant exchange rates

+1% +16% +30% +4% +12% -24%

Negative change

Positive change

-4%


6/1551stQuarter Results as of April 30th, 2014

Net Sales by Brand(mn)1st Quarter

2013Mix

%2014

Mix

%

% ch.

as reported

% ch.

same FX

Prada 568.6 84% 584.8 84% +3% +8%Miu Miu 99.1 15% 101.0 15% +2% +7%

Churchs 8.9 1% 10.0 1% +14% +13%

Car Shoe 1.5 - 1.5 - -4% -2%

Other 0.6 - 0.5 - -15% -15%

Total Retail 678.7 88% 697.8 91% +3% +8%

Total Wholesale 93.9 12% 70.6 9% -25% -24%

Total 772.6 100% 768.4 100% -1% +4%

Prada:

Solid retail performance in Japan and USA ,

Very good performance in mens division, above 20%, consistently with the group strategyMiu Miu

Double digit growth in all region but Europe

Churchs

Excellent retail performance



PradaTotal Net Sales by channel (mn)1st Quarter

Italy10%

Europe20%

America13%

Japan12%

AsiaPacific42%

MiddleEast3%

639 641

Q1 13 Retail Wholesale FxImpact

Q1 14

Negative change

Positive change

+8%-19% -5%



Miu MiuTotal Net Sales by channel (mn)1st Quarter

Italy13%

Europe16%

America7%

Japan18%

AsiaPacific41%

MiddleEast5%

+7% -54%

Negative change

Positive change

-5%

113107

Q1 13 Retail Wholesale FxImpact

Q1 14


9/15


Net Sales by Product(mn)1st Quarter

2013Mix

%2014

Mix

%

% ch.

as reported

% ch.

same FX

Leather Goods 491.5 72% 479.0 69% -3% +2%

Footwear 82.2 12% 95.5 14% +16% +21%

Ready to Wear 97.5 14% 111.2 16% +14% +19%

Others 7.5 1% 12.1 2% +62% +69%

Total Retail 678.7 88% 697.8 91% +3% +8%

Total Wholesale 93.9 12% 70.6 9% -25% -24%

Total 772.6 100% 768.4 100% -1% +4%

The Group strategy favoured a more balanced growth of products portfolio to better convey the image of the brands based

on innovation:

Renewed impulse to Ready to Wear and Footwear

Launch of some iconic new leather goods products


10/15


Group Profit and Loss1st Quarter

mnApr

2014%

2014 vs 2103

Apr2013

%

Net Sales 768.4 98.8% 772.6 98.8%

Royalties 9.3 1.2% 9.7 1.2%

Net Revenues 777.7 100.0% -0.6% 782.3 100.0%

COGS (202.2) 26.0% (206.4) 26.4%

Gross Profit 575.5 74.0% -0.1% 575.9 73.6%

Product Development (28.5) 3.7% (28.1) 3.6%

Advertising & Promotion (41.2) 5.3% (38.8) 5.0%

Selling (302.1) 38.8% (269.0) 34.4%G&A (47.3) 6.1% (44.2) 5.7%

EBIT 156.3 20.1% -20.1% 195.7 25.0%

Net Financial Income / (Expenses) (5.6) 0.7% (5.9) 0.8%

Income Taxes (41.3) 5.3% (48.0) 6.1%

Minority Income (4.1) 0.5% (3.7) 0.5%

Group Net income 105.3 13.6% -23.8% 138.2 17.7%

D&A 57.6 7.4% 45.1 5.8%

EBITDA 213.9 27.5% -11.2% 240.8 30.8%

EBIT D l t 1 t Q t (*)


11/15


2013 GM Selling A&P G&A Other 2014

25.0% -4.5%0.4% -0.1%-0.4% 20.1%-0.3%

EBIT Development1st Quarter(*)

Foreign exchange trend negatively impacted EBIT margin by 0.9%

Wholesale contraction negatively impacted EBIT margin by 1.1%Negative change

Positive change

C ( ) 1 t Q t


12/15


Capex (mn) - 1st Quarter

160

94

18

23

178

117

2013 2014

Corporate & Industrial

Retail

Capex driven by Retail development

Retail includes 13 new openings, 6 relocations and 1 renovation.

R t il i


13/15


Retail overview

551 DOS at April 2014 with 13 openings and 2 closings

NORTHAMERICA: 87 (+6)

EUROPE: 154 (+4)

ITALY: 51

ASIA(EX-JAPAN): 158 (+1)

JAPAN: 72

MIDDLEEAST: 16

SOUTHAMERICA: 10

AFRICA: 3

N t Fi i l S l /(D fi it) ( )


14/15


296 349

109

17 58

122 0 9

NFPJan-14

NetIncome

Net OperatingWorkingCapital

D&A Capex Dividends Others NFPApr-14

Net Financial Surplus/(Deficit) (mn)

Negative change

Positive change

Change in Net financial position

Key figures ( mn)


15/15


Key figures (mn)

April

2014

January

2014

April

2013

Net Financial Position 349.1 295.9 360.5

Net Operating Working Capital 393.2 409.8 287.3

NOWC on Net Revenues 11.0% 11.4% 8.5%

Capital Employed (average) 2,282.8 2,211.7 1,980.6

ROCE 39.4% 42.5% 46.5%

prada 1q 2014 results presentation

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